The following data are from Burton Corporation, a manufacturer, for the month of September: Compute the conversion costs.
A)$335,000
B)$209,000
C)$281,000
D)$256,000

Question

The following data are from Burton Corporation, a manufacturer, for the month of September:  Compute the conversion costs.
A)$335,000 
B)$209,000 
C)$281,000 
D)$256,000

Quizplus · Accepted Answer

Conversion costs include direct labor and factory overhead costs, including indirect labor. Of the salaries and wages listed, only the machine operators are considered direct labor as they are the only employees listed who would actually work on the products themselves. The supervisors are considered factory overhead because their efforts are essential to the manufacturing process, however they do not actually work on the products themselves. The sales office costs and the salary of the secretary would be marketing and administrative expenses as they do not contribute to the manufacturing process.
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The Following Data Are from Burton Corporation, a Manufacturer, for the Month